IAG considering India exit

Insurance Australia Group is considering selling its 26% stake in SBI General Insurance, a joint venture with India’s largest bank, according to market sources.

The insurance company is reported to be in preliminary talks with an investment bank about the proposed sale. It might sell part of its stake before an initial public offering and another part later in the IPO, which could take place in the fourth quarter of 2019.

While no party has yet commented on the story, any sale in India would mark a continuation of exits from Asia for IAG.

Last year, Tokio Marine & Nichido Fire Insurance bought IAG’s operations in Thailand, Indonesia and Vietnam. The Japanese property-casualty insurer paid A$525 million (US$390 million) for IAG’s 98.6% interest in Safety Insurance in Thailand and its 80% holding in Asuransi Parolamas in Indonesia. In a separate transaction, Tokio Marine bought IAG’s 73.07% interest in AAA Assurance in Vietnam for an undisclosed sum.

It is also understood that in Malaysia, Allianz Malaysia and Mitsui Sumitomo Insurance have been shortlisted to proceed to the next round of bidding for AmGeneral Insurance, in a deal that could value the P&C insurer at around M$3.3 billion (US$800 million). IAG owns 51% of AmGeneral while IAG holds the rest of the business.

Any acquirer would need approval from the Malaysian central bank, Bank Negara, before formally entering negotiations with AmGeneral’s owners.